If the government wishes to promote a higher rate of growth of real GDP, a supply-side economist would argue the appropriate policy is
A) engaging in expansionary fiscal policy by lowering marginal tax rates.
B) engaging in expansionary fiscal policy of increasing government spending.
C) lowering marginal tax rates on people and raising them on corporations.
D) leaving the economy alone and letting the natural forces bring it into a long-run equilibrium.
Answer is A) engaging in expansionary fiscal policy by lowering marginal tax rates.
You might also like to view...
The labor force participation rate is the ratio of
A) (the labor force divided by the working-age population) multiplied by 100. B) (the number of unemployed divided by the working-age population) multiplied by 100. C) (the labor force divided by the total population) multiplied by 100. D) (the number of unemployed divided by the labor force) multiplied by 100.
Which of the following is TRUE regarding perfect competition? I. The firms are price takers. II. Marginal revenue equals the price of the product. III. Established firms have no advantage over new firms
A) I and II B) II and III C) I, II and III D) I only